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GameStop is putting forth an offer that CEO Ryan Cohen may, or may not, refuse. According to Reuters, the video games and geek accessories retailer unveiled a pay package which could see Cohen receive ~$35 billion in stock options should he manage to reach the ninth tranche of successful performance for GameStop. Reaching that tranche would mean that GameStop had achieved a market cap of $100 billion -- more than 10 times the current valuation -- with a cumulative performance EBITDA hurdle of $10 billion.
"Cohen will receive no guaranteed pay in the form of salary, cash bonuses or stock options under the package, the company said," per Reuters.
That's a tall order, particularly as GameStop continues to shutter its physical locations stateside and abroad. Per The Independent (via Yahoo! Finance), GameStop trimmed its U.S. store count by 590 locations during the last fiscal year.
Further, the company stated in a December SEC filing that it expects to shut down a "significant number of additional stores" before January 31, 2026. Local media sources, including TheBamaBuzz, indicate that these closures will occur in Alabama, Ohio, Illinois, New York, Kansas, Kentucky, Connecticut, and Minnesota, among other states.
Analyst Projections of GameStop's Future Coming From Both Directions
Meanwhile, analysts retain mixed opinions as to GameStop's future. Much of the common discussion surrounding the company's fortunes since its meme stock rally of 2021 has been critical, with comparisons to essentially extinct video retailer Blockbuster -- and a 36% stock price drop over the course of the past 12 months -- coinciding with its aggressive operational streamlining to produce skepticism over future prospects.
Still, as TheStreet's Daniel Kline noted, not all commentary has been negative. Kline cited investor Stephen Guilfoyle of Sarge986 LLC on the subject.
“[GameStop] did an excellent job of cutting back on both the cost of sales and operating expenses, which boosted margins sharply," Guilfoyle wrote in March of last year, noting that the retailer held "one of the strongest balance sheets" at the time.
“Talk about a turnaround story based upon fiscal discipline despite a core business that remains in decline. This management team has done an outstanding job," he added.
Others were less enthused.
“Mr. Cohen’s top secret strategy was (apparently) to ‘be like Amazon,’ and now that his Amazon executives are gone, it is unclear what strategy is guiding the company,” Wedbush analyst Michael Pachter said, as Kline detailed. “We remain convinced that GameStop is doomed, with declining physical software sales and a shift of sales to subscription services and digital downloads sealing its fate.”
Balancing both the good and the bad was RetailWire BrainTrust panelist and GlobalData managing director Neil Saunders.
“GameStop is not in bad shape, especially as it has a great cash position and has now moved back into the black,” Saunders said in a recent interview with PYMNTS.
“However, sales continue to slide, which raises a question over the company’s proposition. GameStop is one of those firms where you periodically ask whether it is really needed as things become more digital. Both hardware and software sales shrank dramatically this quarter,” he added.
Finally, while Cohen and GameStop's board are in agreement over the proposal, one obstacle remains. Shareholders will be posed the question of whether or not to approve the pay package at a special meeting slated for March or April of this year.